The economist called on Ukraine to prepare for a further collapse of the hryvnia exchange rate
The stabilization of the hryvnia exchange rate against the US dollar is temporary; the Ukrainian currency will continue to depreciate. Oleg Ustenko, executive director of the Blazer International Foundation, stated this at a press conference in Kyiv.
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“There is some kind of temporary stabilization, but I am not an optimist about how development will proceed.
There are a few "buts". The first big “but” is that Ukraine is 6 levels below the investment level, i.e. Foreign capital financing markets are closed for Ukraine. According to Bloomberg, we are the third most likely country to declare a default within the next 12 months. The probability of default in Ukraine is estimated at 17,8%. Above us are Venezuela (18%) and Greece (24%). Below us is Sudan, but it already has 8%, i.e. more than two times less than ours.
Secondly, in the short term (2-3 months), Ukraine is making payments (on external debts). Plus, we must start pumping gas into gas storage facilities. In this case, the minimum need for foreign currency for the fall will be about $3 billion,” says the expert.
According to his estimates, in a negative scenario, when Ukraine is unable to receive new tranches from the IMF, the hryvnia exchange rate could fall to more than 30 UAH per US dollar. Oleg Ustenko estimates the probability of such a scenario at 10%. Under the base scenario (85% probability), the rate by the end of the year will be about 26-27 UAH per dollar.
Under the optimistic scenario, i.e. If President Poroshenko manages to convince American investors to invest in Ukraine in the near future, the hryvnia exchange rate may even rise, but the expert estimates the probability of such a development at 5%.
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